Buyer ‘pulls plug’ on St. Michael theater purchase

The St. Michael City Council heard that a potential buyer for the former Cinemagic theater property has backed out of a purchase agreement.

The council also approved eliminating the city planner position, and authorized purchase of a public works machine from the Army Surplus.

CINEMAGIC

The council was informed that a company interested in redeveloping the Cinemagic site is now not moving forward with a purchase agreement.

"There was a buyer. They had a purchase agreement and did due diligence to see if it would work," city administrator Bob Derus said after the meeting. "They discovered the cost of the project was higher than they wanted to go, and decided to pull the plug."

The unnamed buyer’s proposal would have possibly doubled the site footprint for a retail development. Staff said the company asked that its name remain confidential.

Derus said the company cited recent large retail closings in Rogers, such as Lowe’s and Best Buy.

The theater site closed in late 2010.

Staff is still optimistic that the site will find a buyer due to its prime location at Interstate 94 and Hwy. 241.

POSITION ELIMINATED

In other news, city administrator Derus said it was with great difficulty that he is recommending elimination of the city planner position belonging to Mary Anderson.

"We’ve had to make some difficult decisions over the years," Derus told the council. "Since then the economy has shown little signs of improvement. It’s probably the right time to do this. It’s the toughest thing to do as a manager. It’s difficult."

Derus said the city hasn’t been seeing enough development proposals.

"We just came to the conclusion there’s not enough work to justify it," he said. "Again, this is difficult."

Mayor Jerry Zachman said, "It’s almost like the economy takes its toll."

Derus said for planning work, the city needs new residential development.

Mayor Zachman and councilors Chris Schumm, Nadine Schoen, Joe Marx and Kevin Kasel approved the motion to eliminate the city planner position and offer a severance agreement.

The council thanked Anderson and wished her well in the future.

ARMY BACKHOE

In further matters, public works supervisor Ed Haller updated the council about a potential large machine purchase.

The city recently bought a truck from the Army Surplus, and Haller said he learned about a backhoe that is available from Army Surplus for $7,500. Haller said a new backhoe is in the six-figure range.

The council agreed, after looking at pictures, that the machine appears to be in good condition. The year or amount of hours of use is not known, but the council said it looks like a great deal.

Haller said the city could resell it after 18 months if it decides it does not work for the city’s needs.

The council unanimously authorized staff to purchase the backhoe from the Army Surplus at a cost of $7,500.

In other action, the council:

CONDUCTED a closed session to discuss a possible city property purchase. During the closed session, the council discussed the Economic Development Authority’s motion to acquire the properties at 105 and 109 Central Ave. East, and agreed with a motion for staff to move forward on the acquisition. The properties adjoin the former lumber site that recently burned down.